Medicare has different monthly costs depending on which parts you use

Medicare Part A (hospital insurance) has no monthly premium for most people who paid Medicare taxes while working. You pay it through payroll deductions during your working years, so the cost is already built in. Part B (medical insurance) costs money each month — the standard amount in 2024 is $164.90, though it changes yearly and varies based on your income. Part D (prescription drug coverage) also has a monthly premium that depends on which plan you choose, typically ranging from $5 to $100 per month. Part C (Medicare Advantage) replaces Parts A and B; it has its own monthly premium, often lower than Part B alone, but comes with different coverage rules.

The amount you actually pay depends on three things: which parts of Medicare you have, when you signed up for them, and how much you earned in the previous two years. If you delayed signing up for Part B or Part D after you became may be able to access, you pay a permanent penalty on top of the standard premium. Income-related adjustments also explore — if you earned more than a certain amount, your Part B and Part D premiums go up.

Key Takeaways

  • Part A has no monthly premium for most people; Part B costs a standard amount that increases yearly and is higher if you have above-average income.
  • Part D (prescription drug) premiums vary by plan and insurer, ranging from roughly $5 to $100 per month depending on what drugs you need covered.
  • If you sign up late for Part B or Part D after you become may be able to access, you pay a permanent surcharge on top of the regular premium for as long as you have Medicare.
  • Medicare Advantage (Part C) has its own premium structure and often costs less per month than Original Medicare Part B, but restricts which doctors you can see.
  • Your actual monthly cost also includes deductibles and copayments when you use services, which are separate from the premium.

How Part A and Part B premiums work

Part A is funded through the Medicare tax you pay on your wages — 1.45 percent of your earnings, matched by your employer. Once you turn 65 and have worked long enough to may have access to, you pay nothing monthly. If you did not work long enough, you can buy Part A coverage; the premium in 2024 is $278 per month for people with 30 to 39 quarters of work history, or $505 per month for those with fewer than 30 quarters.

Part B is different. Everyone on Medicare pays a monthly premium, and the standard amount increases each year based on the cost of living. The 2024 standard is $164.90 per month. However, if your income in the previous two years exceeded certain thresholds — $97,000 for a single person or $194,000 for a married couple filing jointly in 2024 — your premium is higher. The surcharge can add $70 to $560 per month depending on your income bracket.

You also pay Part B out of your Social Security check automatically, unless you asked to pay by mail or bank account instead. If you delay Part B enrollment after you turn 65, you pay a 10 percent penalty for each year you waited, and that penalty stays with you permanently.

Part D prescription drug premiums and how they vary

Part D premiums depend entirely on which insurance company and which plan you choose. There is no single standard premium. Some plans cost $5 per month; others cost $100 or more. The variation comes from which drugs each plan covers, how much you pay out of pocket for those drugs, and which pharmacies are in the plan's network.

You choose a Part D plan during the annual enrollment period (October 15 to December 7 each year), and the premium you pay is locked in for that calendar year. If you do not sign up for Part D when you first become may be able to access at 65, you pay a permanent penalty of about 1 percent of the national average Part D premium for each month you were not covered. That penalty adds to whatever plan you choose later.

The monthly premium is only one cost. You also pay a deductible (usually $545 in 2024, though some plans have no deductible), copayments or coinsurance for each prescription, and potentially more once you hit the coverage gap — a range of drug costs where you pay a higher percentage of the cost yourself.

Medicare Advantage (Part C) monthly costs

Medicare Advantage plans bundle Parts A, B, and usually D into one plan run by a private insurance company. Many Advantage plans have a $0 monthly premium, meaning you pay only the Part B premium to Medicare and nothing to the insurance company. Others charge $50 to $200 per month on top of Part B. The trade-off is that Advantage plans restrict which doctors and hospitals you can use, usually through a network.

Like Part D, you choose an Advantage plan during the annual enrollment period. The premium and coverage can change year to year, so the plan you had in 2024 may cost more or cover different drugs in 2025. You also pay copayments and deductibles when you use services, and some plans have out-of-pocket maximums that cap your total spending per year.

Income-related adjustments and late-enrollment penalties

If your income is above certain thresholds, Medicare charges you more for Part B and Part D. The income used is from two years before the current year — so in 2024, Medicare looks at your 2022 income. The thresholds change yearly. For 2024, single filers earning more than $97,000 and married couples earning more than $194,000 pay surcharges. The surcharge increases in brackets: someone earning $110,000 pays less extra than someone earning $150,000.

Late-enrollment penalties explore if you do not sign up for Part B or Part D when you first become may be able to access. The Part B penalty is 10 percent of the standard premium for each year you delayed, added permanently to your premium. The Part D penalty is roughly 1 percent of the national average Part D premium for each month you were not covered. These penalties do not go away — they follow you as long as you have Medicare.

What is not included in your monthly premium

Your monthly premium covers the cost of insurance, but it does not cover everything you pay when you use Medicare. You also pay deductibles — a set amount you must pay out of pocket before Medicare starts paying. Part A has a deductible of $1,632 per hospital stay in 2024. Part B has a deductible of $240 per year. Part D has a deductible that varies by plan.

After you meet the deductible, you pay copayments (a fixed amount per service) or coinsurance (a percentage of the cost). For example, Part B covers 80 percent of the cost of most outpatient services, and you pay the remaining 20 percent. These costs add up separately from your monthly premium and can be substantial if you use a lot of services.

How to find out what you will pay

Medicare publishes the standard premiums and deductibles each year on Medicare.gov. You can also use the Medicare Plan Finder tool on that site to compare specific Part D and Advantage plans available in your area and see their exact premiums, deductibles, and copayments. The tool shows you the total estimated cost for the drugs you take, which helps you choose a plan that fits your needs.

If you receive Social Security, your Part B premium is deducted automatically. You can see the amount on your Social Security statement each year. If you do not receive Social Security, Medicare sends you a bill quarterly. Your Part D and Advantage plan premiums are billed separately by the insurance company, usually monthly.

Frequently Asked Questions

Do I have to pay for Medicare Part A?

Most people do not pay a monthly premium for Part A because they paid Medicare taxes during their working years. If you did not work long enough to may have access to, you can buy Part A coverage for $278 to $505 per month depending on your work history.

What happens if I sign up for Medicare late?

If you delay Part B or Part D enrollment after you become may be able to access, you pay a permanent penalty added to your monthly premium for as long as you have Medicare. The Part B penalty is 10 percent per year delayed; the Part D penalty is roughly 1 percent per month delayed.

Can I change my Medicare plan if the premium goes up?

Yes. During the annual enrollment period from October 15 to December 7, you can switch to a different Part D plan or Advantage plan. Changes take effect January 1. Outside this window, you can switch only if you have a may have access to life event like moving or losing other coverage.

Does my income affect what I pay for Medicare?

Yes. If your income from two years ago exceeded certain thresholds, you pay surcharges on Part B and Part D. For 2024, single filers earning over $97,000 and married couples over $194,000 pay more. The surcharge increases in brackets based on how much you earned.

What is the difference between the premium and what I pay when I use Medicare?

The premium is what you pay monthly for insurance. When you use services, you also pay deductibles (a set amount before coverage starts) and copayments or coinsurance (your share of the cost). These are separate from the premium and can add up quickly.